A model for collaborative information sharing between banks and SMES in Uganda

Abstract

Access to reliable and timely business information has been identified as a major problem to majority smallholder firms in Uganda and related to this problem is the inability of Ugandan banks to provide their SME clients a platform for accessing and sharing information that has led to the persistent failure rate of SMEs. This can be attributed to the lack of logical design through which banks and SMEs can collaborate to exchange relevant business information. Moreover, this area has not received any scholarly attention in Uganda. This study, therefore, sought to construct an information-sharing model and validate its usefulness towards enabling SMEs and banks to access reliable and relevant business information and determine which factors are responsible for the success and sustainability of such a collaborative arrangement within a Ugandan context.

The study adopted a mixed-method research approach and employed surveys, interviews, and systematic literature review to examine thirty SMEs in Kampala from FINCA (U) Ltd clientele base. The SMEs and respondents from the SMEs were purposively selected to avail information for the study. The process of model development followed design science guidelines and validation using expert insights and simulation. Organizational factors were found to be the most influential on the success of collaborative information sharing however, the success is a result of addressing a combination of factors from other dimensions as well such as technological, process and strategic dimensions. Overall, SME to bank collaborative information sharing is highly influenced by inter-firm trust, technology complexity (ease of use), top management support, IT capability, perceived benefits, collaboration championship, cost of technological adoption, technological risks, information quality, and organizational structure.

Therefore, when establishing information-sharing alliances between SMEs and banks, considerations are drawn from technological, organizational, process and strategic perspectives. It requires establishment of secure information sharing platforms, building an organizational culture and structure that supports information sharing, alignment and redesign of business process and defining a strategic direction that will guide and sustain the collaboration. While this study's focus was on SMEs and banks in Kampala, further research could focus on applying the model in other sectors where information sharing is a requirement and validating the adopted design principles.